The Reserve Bank of Australia (RBA) meeting may keep Australian Dollar: USD/AUD (AUD=X) under pressure

The Reserve Bank of Australia (RBA) meeting may keep Australian Dollar: USD/AUD (AUD=X) under pressure

The Reserve Bank of Australia (RBA) meeting may keep Australian Dollar: USD/AUD (AUD=X) under pressure

Recent comments from Governor Philip Lowe suggest the RBA will adopt a more dovish tone in 2019 as ‘available data suggest that the underlying trend in consumption is softer than it earlier looked to be,’ and the central bank may show a greater willingness to further support the economy as the ‘progress towards our goals was expected to be only gradual.’ In turn, a batch of a dovish comments from Governor Lowe & Co. may trigger a bearish reaction in the AUD/USD exchange rate as it fuels bets for a rate-cut.

However, more of the same from the RBA may undermine the recent weakness in the Australian dollar especially if the central bank reiterates that ‘there was not a strong case for a near-term adjustment in monetary policy.’

The Reserve Bank of Australia (RBA) kept the official cash rate (OCR) at the record-low of 1.50% after holding its first meeting for 2019, with the central bank largely sticking to the same script as ‘the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.’

The remarks suggest the RBA is in no rush to alter the monetary policy outlook as ‘the low level of interest rates is continuing to support the Australian economy,’ and it seems as though the central bank will stick to the wait-and-see approach over the coming months ‘the central scenario is for the Australian economy to grow by around 3 per cent this year and by a little less in 2020 due to slower growth in exports of resources.’

Overall, the bias in prices is: Sideways.

The projected upper bound is: 0.72.

The projected lower bound is: 0.70.

The projected closing price is: 0.71.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 14.3939. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 8 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 43.72. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 51 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -128.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.

Rex Takasugi – TD Profile

FOREX AUD= closed down -0.001 at 0.708. Volume was 51% below average (consolidating) and Bollinger Bands were 45% narrower than normal.

Open High Low Close Volume___
0.709 0.710 0.706 0.708 55,035

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 0.71 0.71 0.72
Volatility: 9 11 11
Volume: 105,309 104,810 108,339

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX AUD= is currently 2.3% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of AUD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on AUD= and have had this outlook for the last 14 periods.

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